SLI profits up sharply on big increase in fee revenue

Standard Life Investments operating profit rose 9% over the first half of the year following a 20% increase in fee revenue as it benefited from a shift toward higher margin funds.

Average fee revenue on third-party business rose from 45 basis points in the same period of 2013 to 47bps. Third party assets under management rose 5% to £108 billion while total AUM rose 3% to £195 billion.

At least part of that was likely to reverse in the third quarter, with SLI warning it would see £2.3 billion in previously-agreed redemptions, but added this was from ‘low revenue margin mandates’.

Operating profit at parent group Standard Life rose more than 10% over the period from £304 million to £339 million.At 8.17 shares in the company were up 2.74% at 374.3p.

‘SLI remains focused on delivering excellent investment performance, expanding its investment capabilities and increasing its distribution channels and geographic reach,’ said the company.

‘This is reflected in a robust pipeline of institutional business and continued demand for our wholesale propositions.

‘The integration of Ignis has started well and although it is at an early stage we see good momentum in the business. The acquisition enhances the strategic position of SLI and will be earnings accretive in its first full year.’

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